Wednesday, July 20, 2011

No Lifeline for Zindagi Na Milegi Dobara

By Anant Mathur (July 20, 2011)

It disappoints me when I see experts who have no clue of how a film's finance work share their figures. Contrary to what some websites and the so called experts are reporting - even if Zindagi Na Milegi Dobara earns 28 crores at the box office and 31 crores from satellite and music rights - the distributors still won't recover the 55 crores cost of the film. Here's why...

As I have explained in previous posts, it's not the nett earnings which define if a film is successful or failed, it's the distributors' share. So, in the case of Zindagi Na Milegi Dobara, if the film has earned 28 crores at the box office the distributors' share, at most, is approximately 15 crores (the rest is the exhibitors share). This means the distributors still need to recover 40 crores.

There's a trend of adding satellite and music rights to the revenues of a film in order to fool people into believing that the film is more successful than it actually is. Film are made for the big screen, if they weren't they would be released on Television first. Distributors who pay 55 crores for a film only earn it back from the theatrical revenues because the producers usually own the other rights. In order for the distributor (Eros Entertainment) to earn back the additional 40 crores Zindagi Na Milegi Dobara has to earn at least another 75-80 crores from the theatrical revenues - which is impossible in this case since nowadays it's the first weekend that counts. For Zindagi Na Milegi Dobara the first weekend proved fatal as it has failed to earn back it's cost. I've said it before and I'll say it again it very difficult for films with budgets over 25 Crores to make money in India. 

The recently released film Ready earned 69.5 crores in the first week and another 32.25 in the second week. Ready was also made for a smaller budget and cost the distributor 40 crores - the first week's distributors share was enough to recover the distributors cost (because single screen exhibitors share is less than multiplexes). Zindagi Na Milegi Dobara has to earn atleast 80-90 crores in the first week in order for it to have any chance of being successful, 28 crores just isn't enough.

Zindagi Na Milegi Dobara has no prospects and will likely earn another 20-25 crores before it ends its lifetime run. EROS Entertainment will lose a lot of money in this case and Excel Entertainment - the producers - who will earn the 31 crores from satellite/music rights and who likely sold the film to Eros for 50 crores are earning 50 crores from the distributor and 31 crores from the other rights. Excel has earned a total of 81 crores and their profit is probably more than 40 crores because I doubt it cost them more than 40 crores to make this film. Eros, meanwhile, has only earned 15 crores and need to recover another 40 crores. As usual, the producers are laughing all the way to the bank and it's the distributor who loses in the end.

© Anant Mathur. All Rights Reserved.

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